This is one of the conclusions of the ‘Good Services – Great Business’ event organized by ZF in partnership with the Association of Business Service Leaders in Romania (ABSL) in Bucharest on Tuesday.
“With all the talk about subsidies, about money, industry is still looking at people first of all,” said Pawel Panczyj, managing director of ABSL Poland.
This is what needs to be discussed: how many well-trained people actually are in Romania, ready to take on the tasks the outsourcing industry needs done, he added.
In his opinion, the authorities should first inquire into what companies want in order to expand their business and then think of providing incentives like state aid and subsidies.
The Romanian government has three state-aid schemes in place and one of them supports use of new technologies and job creation. Under this particular scheme, the government granted EUR67 million state-aid to seven applicants for creation of more than 3,100 jobs last year.
Local outsourcing industry is currently employing 60,000 people and companies in this business should see EUR1.5 billion revenue in 2014.
The revenue of the companies in the industry could significantly increase in the next five years, as foreign investors consider Romania an extremely attractive market.
“Romania is second in Europe after Poland and among the top ten countries in the world by development of outsourcing service market, which has been growing at a rate of 20% to 30% a year over the last few years,” said Alexander Weigl, chairman of ABSL Romania at the ‘Good Services – Great Business’ event on Tuesday.
Weigl, who is also director of Marketing Transformation at Hewlett-Packard, was a guest on ZF Live on Tuesday, as well, where he said there is potential for an increase in the number of employees in the outsourcing industry to 150,000 – 200,000 in the next five years.
Romanians’ foreign language skills, the high number of college graduates compared with other European countries and the low labor costs are just some of the reasons that helped spur the development of the outsourcing industry in Romania, industry leaders say.
The good educational system, the high number of university graduates, the language skills, the lower costs, work ethics and work quality of employees are but part of the Romania’s advantages in the outsourcing industry, said Ronald Gilette, chief operating officer of WNS Romania, who attended the event on Tuesday.
Jeffrey Purrit, the chairman of Canadian outsourcing service provider Telus International (which has more than 400 employees in Romania), says the company will continue investment in this country, encouraged in part by the fact that 4.7 million Romanians speak French.
Some risks do exist that can slow down the development of the outsourcing industry, though.
“The quality of graduates currently meets the requirements of the industry but I don’t see how it will continue to in the future if we don’t forge this partnership between employers and the education system,” explained Marinela Tanase, HR manager of British American Shared Services Europe (BAAS), the services center of cigarette manufacturer British American Tobacco.
Pawel Panczyj, managing director ABSL Poland, where the outsourcing market is double Romania’s, says that when it comes to making a new investment in this sector companies do not think in terms of Poland, Czech Republic or Romania but in terms of Europe and what companies should fight for is keeping the ‘brain-related jobs’ in Europe not those that require ‘filling out Excel sheets’.
On the other hand, Florian Libocor, BRD-Groupe Societe Generale’s chief economist, believes Romania’s competitive edge provided by cheap labor will not last long. Moreover, low wages generate low added value for the economy, he said.
(English version by Loredana Fratila-Cristescu)